The belts (power steering and alternator) needed to be replaced at 115,000 miles.
An O2 sensor needed to be replaced at the same time as the belts, for a total cost of approx. $250.
Catalytic converter is going bad, but I chose not to replace it.
Developed a misfire at 125,000 miles, so the plugs and wires were replaced for approx. $150.
Shocks needed to be replaced at 112,000 miles.
The ride is not that great; it's similar to driving a go-kart at highway speeds.
The 2-door model (the one I have) has basically no back seat; the only people who could be comfortable back there would be double amputees.
The automatic transmission sometimes feels slow and lazy.
Starts to burn oil if you go more than 3000 miles between changes.
The lack of features on the CE model (i.e. power windows, cruise control, variable speed wipers, adequate heating/cooling) make the car feel cheap and overly simplified.
Let me start out by saying that this car was the best purchase I ever made. The list of faults may be long, but they are all actually minor problems. This car has been more reliable than both of my parents' brand new cars.
I bought it from a guy I knew in high school for $1000, because I knew I needed to travel a lot when I started college and my new job. I knew my '68 Chevy was not going to be able to swing about 350 miles a week. I found the Tercel in a neighbor's driveway a week after graduation with a nice price tag, and I bought it on the spot.
The Tercel is ideal for commuting; it gets around 30 MPG, which is not great, but it's a lot better than other cars. I'm sure it could do better if I gave it a tune up, but I never got around to it.
The Tercel is SLOW. The only way to accurately measure its 0-60 time is using a geologic time scale. It takes a long time to get up to speed on the interstate, and keeping it at 65-70mph can be somewhat of a challenge. In my year of ownership, I could only break 80 mph twice. It always felt like I was redlining at 70 mph, not cruising like you're supposed to. In physics class I calculated that with all of its 93 horsepower, it could not exceed 30 mph on an 18 degree hill (which I have to go up every day to school).
The ride is not great; it's pretty bumpy. The straight axle in the back contributes to the problem. The car is very small, so I feel every single pothole. Also, there is no traction control or ABS, so driving in inclement weather can be difficult.
The trunk is surprisingly spacious and the engine is easy to work on, making it easy to do-it-yourself. Parts are cheap, and so is labor if you bring it to a mechanic. Also, I believe that this engine (1.5L) is one of the only 1997-2003 Toyota engines that WASN'T prone to the oil gelling defect.
Without a doubt this is the most reliable car I've ever had, and the best $1000 I've ever spent. It got me through my first year of college, it's cheap to buy, own, insure, and maintain, and the rear spoiler attracts ALL of the ladies. It's a win-win situation. If you can find one, BUY IT because this car is one of the wisest investments you can make. I sold the Tercel about 1 year after purchase because I had enough money to buy a bigger car with a manual transmission and lower miles. I bought a Mitsubishi Lancer, which I hope I will also have good luck with.
The Tercel may not be well equipped, particularly good looking or fast, but it gets the job done and will never leave you stranded.